BALTIMORE — A bill, introduced Monday night in the Baltimore City Council, looks to lift the pay of tipped workers to the minimum wage.
A group of activists joined Councilmember John Bullock, representing council district 9, in front of Baltimore City Hall before the meeting.
"Even though I enjoyed working as a server, I just couldn't afford to have that job any longer because I couldn't afford to have the things I needed for my family," said Jinaki Olatunji, a former server in the Baltimore area.
Olatunji left the industry because of it.
"That's on every voter's mind this season," Olatinju added. "How can we make sure everybody is being able to afford a wage they can live on and sustain their families?"
Bullock put forth the bill, which, over the course of a few years, would phase out the tip credit an owner can deduct from a tipped worker's check.
"We are not going away from having workers be able to earn tips," Bullock said. "However, what we don't want them to do is to be wholly dependent upon those tips to be able to support their families."
Right now, their state minimum is $3.63 an hour; restaurant owners are currently required to make up for any low tip income to get workers to the full minimum wage.
A similar effort, also backed by the nationally-active 'One Fair Wage' group, did not pass the Maryland statehouse this past winter.
READ MORE: General Assembly to debate ending the sub-minimum wage in Maryland
In response to the Baltimore effort, the Restaurant Association of Maryland, which comprises about 3,000 eateries, provided a statement, reading in part:
"Restaurant server earnings would significantly decrease if the tip credit was eliminated because most restaurants would be forced to impose service charges on customer checks to cover the substantially higher labor costs."
"Customers are unlikely to tip on top of service charges. And there would be no incentive for servers to provide the best possible customer service if they were no longer rewarded with tips."
The organization's full position statement is available below:
The Restaurant Association of Maryland strongly opposes Baltimore City legislation that would eliminate the tip credit because of the negative consequences it would have on tipped employee earnings, restaurant operators, and customers.
Contrary to the false narrative used by advocates supporting this legislation, there is no “subminimum wage” for restaurant tipped employees under state and local law. Maryland’s minimum wage law allows employers to pay tipped employees a base wage of at least $3.63 per hour. Under state and local minimum wage law, employers are required to make up any deficiencies if a tipped employee does not earn enough in base wages plus tips to make at least the full minimum wage per hour for the workweek.
Tipped employees are among the highest earners in full-service restaurants, earning a median of $27/hour including tips, according to National Restaurant Association research. Some servers can earn $40 or more per hour including tips.
State and local policymakers in Maryland have consistently preserved the tip credit. In six previous legislative sessions (including 2024), the Maryland General Assembly considered legislation that would have phased out the tip credit statewide, but it failed to pass because of strong opposition from tipped employees and restaurant operators. Servers and bartenders have repeatedly urged lawmakers to reject such proposals because they earn significantly more money under the current tipping system.
Locally, a Prince George’s County Council Committee decided (on 10/12/2023) not to move forward with legislation that would have phased out the tip credit there after hearing strong opposition from local servers and restaurant operators. The Montgomery County Council also heard strong opposition from local servers and restaurants during a 10/17/2023 public hearing on similar legislation. The Montgomery County legislation did not have enough Council support to pass and was withdrawn on 1/16/2024. In 2021, the Howard County Council voted to preserve the tip credit in their local minimum wage law.
Restaurant server earnings would significantly decrease if the tip credit was eliminated because most restaurants would be forced to impose service charges on customer checks to cover the substantially higher labor costs. Customers are unlikely to tip on top of service charges. And there would be no incentive for servers to provide the best possible customer service if they were no longer rewarded with tips.
Legislation to eliminate the tip credit is being pushed by a well-funded, Massachusetts-based activist group as part of their nationwide agenda. Maryland’s state and local policymakers should reject that group’s efforts to pursue their agenda at the expense of local restaurants and tipped employees who support maintaining the tip credit."
Bullock said he wants to discuss the outcome with restaurateurs.
"All that has to be part of the conversation," Bullock said. "I do think in some ways the dramatic effect may be overblown, but the affect still remains. We do understand that wages are a part of that price structure."
Bullock told WMAR a number of council members are already on board.
"It's not a new concept; I'll put it that way. And there have been other members we've had conversations with," Bullock added.
The bill would still need to survive a committee and a full council vote.
